How Interest Rates Have Affected the Marketplace

Looking to sell your Las Vegas area home? Get a home value report Looking to buy a home in the Las Vegas area? Use our home search tool Where have interest rates gone from the beginning of the year? On January 1st, they were floating at just below 4% for a 30-year fixed mortgage. Now, as of one week ago, they’re averaging just under 3.5%. If we take a scenario like a $300,000 mortgage and try to configure the difference in terms of affordability, that equals out to just $75 to $100 per month. What’s keeping interest rates so low and affordable? A big factor has been the Brexit , or Great Britain’s initiative to exit the European Union. Because it’s still uncertain what the Brexit is doing, it’s creating a concern in the marketplace. This kind of effect usually has a direct impact on where interest rates go. Since it’s thus far kept them low, buyers and homeowners have had more incentive to stay in the market. “ Low interest rates have given both buyers and sellers incentive to stay in the market. ” For buyers, lower interest rates present more affordable homes, thus enticing them to enter the marketplace in greater numbers. For homeowners, lower interest rates presents a great opportunity to refinance at a lower rate and lower their debt obligation. This cycle creates upward pressure on pricing, and for the last year or two we’ve seen a steady increase in home values of about 5% to 6% nationwide. Where will interest rates go over the next 12 months? A report just came out recently, based on Fannie Mae, Freddie Mac, the Mortgage Bankers Association, and the National Association of Realtors, that projects that interest rates will stay flat or increase slightly over the next couple quarters. Toward the end of next year they’re predicted to rise from .25% to .5%. In the near future, affordability is going to stay strong and present great opportunities for both buyers and sellers. If you have any questions on the topics we covered or you’d like me to cover a specific topic in the future, feel free to contact me by phone or email.

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How Interest Rates Have Affected the Marketplace is an episode from Las Vegas Real Estate Podcast with Corey Toushin.

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This episode was published on Jul 22, 2016.

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